The general formula for the circuit of commodity capital looks like this:
C' shows up not just as a product, but also as something the two earlier circuits already assumed. What is M-C for one capital already contains C'-M' for another — because at least part of any capital's means of production is itself the commodity-product of some other individual capital, one that's running through its own circuit. In our example, the coal, the machines, and so on are the commodity capital of the coal-mine owner, of the capitalist machine-builder, and so on.
It was already shown in Chapter 1, 4 that even at the very first repeat of M...M', before that second circuit of money capital is even finished, both the circuit P...P and the circuit C...C' are already presupposed.
If reproduction takes place on an expanded scale, then the closing C' is larger than the opening C', and should therefore be called C'' here.
The third form differs from the first two, first, in this: here it's the overall circulation, with its two opposite phases, that opens the circuit. In Form I, by contrast, circulation gets interrupted by the process of production; in Form II, the overall circulation, with its two complementary phases, appears only as mediating the process of reproduction, forming the movement that mediates between the two P's — between production and its renewal.
At M...M', the circulation takes the form M-C...C'-M', that is, M-C-M. At P...P it's the reverse: C'-M'.M-C, that is, C-M-C. In C'...C' it likewise has this same latter form.
Second: in the repeated circuits I and II, even though the closing points M' and P' become the starting points of the renewed circuit, the form in which they were produced disappears. M' = M+s, P' = P+s — each simply starts the new process again as M and P. In Form III, though, the starting point C must be called C' even when the circuit is renewed at the same scale, and here's why.
In Form I, as soon as M' as such opens a new circuit, it functions as money capital M — an advance, in money-form, of the capital-value that is to be valorized. The size of the advanced money capital has grown, through the accumulation carried out in the first circuit. But whether the advanced money capital comes to £422 or £500 makes no difference: either way it appears simply as capital-value. M' no longer exists as valorized capital, as capital pregnant with surplus-value, as the capital-relation — it has yet to be valorized in the process. The same holds for P...P': P' must always keep functioning as P, as capital-value that is still to produce surplus-value, in order to renew the circuit.
The circuit of commodity capital, by contrast, doesn't open with capital-value but with capital-value that has already grown, in commodity-form — so from the very start it includes the circuit not only of the capital-value present in commodity-form but also of the surplus-value. So if this form undergoes simple reproduction, a C' of the same size shows up at the close as at the start. If part of the surplus-value goes into the capital's circuit, then a larger C' — call it C'' — appears at the close instead of C'; but the circuit that follows opens again with C', which is simply a larger C' than in the previous circuit, and begins its new circuit with a larger accumulated capital-value, and so also with a proportionally larger newly produced surplus-value. In every case, C' opens the circuit always as a commodity capital that equals capital-value plus surplus-value.
C' functioning as C, within the circuit of a single industrial capital, doesn't appear as a form of that capital — it appears as a form of some other industrial capital, insofar as the means of production are that other capital's product. The act M-C (that is, M-C for means of production) for the first capital is C'-M' for this second capital.
In the circulation act M-C, labour-power and means of production behave identically in one respect: both are commodities in the hands of their sellers — labour-power in the hands of the workers who sell it, means of production in the hands of the owners who sell them. For the buyer, whose money here functions as money capital, they're only commodities for as long as he hasn't yet bought them — for as long as they still confront his capital, which exists in money-form, as commodities belonging to someone else.
Means of production and labour-power differ here only in this: means of production, in the hands of their seller, can be C' — that is, capital — if they're the commodity-form of that seller's capital. Labour-power, by contrast, is always merely a commodity for the worker, and becomes capital only in the hands of the buyer, as a component of P.
C' can therefore never open a circuit as mere C, as a mere commodity-form of the capital-value. As commodity capital, it's always a double thing. Looked at from the standpoint of use-value, it's the product of P's function — here, yarn — whose elements, labour-power and means of production, arriving from circulation as commodities, functioned only as the formers of this product. Second, looked at from the standpoint of value, it's the capital-value P plus the surplus-value produced by P's functioning.
Only within the circuit of C' itself can — and must — C, which equals P, which equals the capital-value, split off from the part of C' in which surplus-value exists: from the surplus-product that carries the surplus-value. It doesn't matter whether the two are actually separable, as with yarn, or not, as with a machine. They become separable every time, as soon as C' is converted into M'.
If the whole commodity-product can be split into independent, uniform part-products — like our 10,000 lb of yarn — so that the act C'-M' can take the form of a series of sales carried out one after another, then the capital-value can function as C in commodity-form and detach itself from C' before the surplus-value is realized — that is, before C' as a whole is realized.
Take the 10,000 lb of yarn worth £500. The value of 8,440 lb of it — £422 — equals the capital-value, kept separate from the surplus-value. If the capitalist sells those 8,440 lb of yarn for £422 first, then this 8,440 lb represents C, the capital-value in commodity-form; the remaining surplus-product contained in C' — 1,560 lb of yarn = £78 of surplus-value — would only enter circulation later. The capitalist could complete the capital-value's sale-and-repurchase, C-M-C before the surplus product's own circulation c-m-c — its sale and the spending of the proceeds — had even begun.
Or, if he first sold 7,440 lb of yarn worth £372, and then 1,000 lb of yarn worth £50, then the first part of C could replace the means of production — the constant part of capital, c — and the second part of C could replace the variable part of capital, v, meaning the labour-power. And it would work the same way as before.
But if such successive sales do happen, and the conditions of the circuit allow it, the capitalist can also make this same split — into c + v + s — within aliquot parts of C', rather than only across C' as a whole.
For example, 7,440 lb of yarn = £372, which as part of C' (10,000 lb of yarn = £500) represents the constant part of capital, can itself be broken down further: 5,535·360 lb of yarn worth £276·768, which merely replaces the constant part — the value of the means of production used up in producing the 7,440 lb; 744 lb of yarn worth £37·200, which replaces only the variable capital; and 1,160·640 lb of yarn worth £58·032, which as surplus-product carries the surplus-value.
So out of the 7,440 lb sold, he can replace the capital-value they contain by selling 6,279·360 lb of yarn at a price of £313·968, and spend the value of the surplus-product — 1,160·640 lb = £58·032 — as revenue.
In the same way, he can further break down the 1,000 lb of yarn = £50 = the variable capital-value, and sell accordingly: 744 lb of yarn at £37·200, the constant capital-value of the 1,000 lb; 100 lb of yarn at £5·000, its variable capital part; together 844 lb of yarn at £42·200, replacing the capital-value contained in the 1,000 lb; and finally 156 lb of yarn worth £7·800, representing the surplus-product contained in it, which can be consumed as such.
Finally, if the sale succeeds, he can break down the remaining 1,560 lb of yarn worth £78 so that selling 1,160·640 lb of yarn at £58·032 replaces the value of the means of production contained in the 1,560 lb, and 156 lb of yarn worth £7·800 replaces the variable capital-value — together, 1,316·640 lb = £65·832, replacing the entire capital-value. Finally, the surplus-product of 243·360 lb = £12·168 remains to be spent as revenue.
Just as every element — c, v, s — existing in the yarn can be broken down again into these same parts, so too can every single pound of yarn worth 1 shilling = 12 pence.
Add up the results of the three partial sales above, and you get exactly the same result as selling the 10,000 lb of yarn all at once.
C'-M' is, by itself, nothing but a sale of 10,000 lb of yarn. The 10,000 lb of yarn is a commodity like any other yarn. The buyer cares about the price: 1 shilling a pound, or £500 for the 10,000 lb. If he gets drawn into talking about how that value breaks down, it's only with the sly aim of showing that the pound could be sold under a shilling and the seller would still be doing good business. But how much he buys depends on his own needs — if he's a weaving-mill owner, say, it depends on the make-up of his own capital at work in weaving, not on the make-up of the spinner's capital, the one he's buying from.
The proportions in which C' has, on one side, to replace the capital worked up in it — or rather its various parts — and, on the other side, has to serve as surplus-product, whether for spending as surplus-value or for accumulating as capital, exist only within the circuit of the capital whose commodity-form this 10,000 lb of yarn is. They have nothing to do with the sale as such. It's also assumed here that C' sells at its value, so that all that's happening is its conversion from commodity-form into money-form.
For C', as the functional form within this particular capital's circuit — the form out of which the productive capital has to be replaced — it obviously matters a great deal whether, and how far, price and value diverge in the sale. But that's not our business here, where we're looking only at the bare differences of form.
In Form I, M...M', the production process appears in the middle, between the two circulation phases of capital that complete each other and stand opposed to each other. It's already over and done with by the time the closing phase, C'-M', begins. Money is advanced as capital: first it goes into the elements of production, then those are turned into a commodity product, and that product is turned back into money. This is one finished business cycle, and its result is money — usable for absolutely anything.
So starting the cycle again is only a possibility here, not something guaranteed. M...P...M' can just as well be the very last circuit, closing out an individual capital's business when its owner retires, as it can be the first circuit of a capital just starting up. The general movement here is M...M' — money becoming more money.
In Form II, P...C'-M'-C...P (or P'), the whole circulation process comes after the first P and before the second — but in the reverse order from Form I. The first P is productive capital, and its job, the production process, is what has to happen before the circulation process that follows it. The closing P, though, is not the production process itself. It's only industrial capital showing up again in its shape as productive capital. And it gets there because the last phase of circulation converted the capital-value into labour-power and means of production — the human and material factors that, joined together, are what productive capital consists of. Capital, whether P or the larger P', ends up back in a form where it has to function as productive capital again and go through the production process once more.
The general shape of this movement, P...P, is the shape of reproduction. Unlike M...M', it doesn't announce valorization as the point of the whole exercise. That makes it all the easier for classical economics to set aside capitalism's specific form of the production process and present production itself as the point — as if the goal were simply to produce as much as possible, as cheaply as possible, and exchange the product for as many different other products as possible: partly to start production up again (M-C), partly for consumption (m-c). Because money here, M and m, shows up only as a means of circulation that vanishes the moment it's used, the special features of both money and money-capital can be lost sight of, and the whole process appears simple and natural — the naturalness of a flat, shallow rationalism.
The same thing happens with commodity-capital: profit occasionally gets forgotten, and as soon as the production circuit is discussed as a whole, commodity-capital figures merely as 'commodity'; when its value-components come up, it figures as commodity-capital. Accumulation, naturally, appears the same way production does.
In Form III, the two phases of the circulation process open the circuit, in the same order as in Form II, P...P; then P follows, functioning as in Form I — the production process; and the circuit closes with that process's result, C'. As in Form II, where P is only the renewed presence of productive capital, here the circuit closes with C', the renewed presence of commodity-capital. And just as in Form II capital, in its closing form P, has to begin the process again as a production process, here too, once industrial capital reappears in the form of commodity-capital, the circuit has to open itself anew with the circulation phase C'-M'. Both of these forms are unfinished, because neither closes with M', the valorized capital-value turned back into money. Both must therefore be carried further, and so they include reproduction within themselves. The whole circuit in Form III is C'...C'.
What sets the third form apart from the first two is that only in this circuit does the valorized capital-value — not the original capital-value still to be valorized — appear as the starting point of its own valorization. C', as a capital-relation, is the starting point here, and as such it determines the whole circuit: already in its first phase it encloses both the circuit of the capital-value and the circuit of the surplus-value. And the surplus-value — if not in every single circuit, then on average — has to run partly through the circulation m-c-m as revenue spent, and partly serve as an element of capital accumulation.
In the form C'...C', consumption of the entire commodity-product is presupposed as a condition for the normal course of capital's circuit itself. The worker's individual consumption, together with the individual consumption of the part of the surplus-product that isn't accumulated, makes up the whole of individual consumption. So consumption, in its entirety — both individual and productive — enters the circuit C' as a condition. Productive consumption (which really includes the worker's individual consumption within it, since labour-power is, within certain limits, a constant product of the worker's individual consumption) is carried out by each individual capital itself. Individual consumption, beyond what the individual capitalist needs for his own existence, is only assumed here as a social act — not at all as an act of the individual capitalist.
In Forms I and II, the whole movement presents itself as the movement of the advanced capital-value. In Form III, the valorized capital, in the shape of the entire commodity-product, forms the starting point and has the form of capital in motion — commodity-capital. Only once it's turned into money does this movement branch off into a movement of capital and a movement of revenue. The distribution of the total social product — and likewise the particular distribution of the product belonging to each individual commodity-capital — partly into funds for individual consumption, partly into funds for reproduction, is, in this form, built into capital's circuit itself.
In M...M', a possible expansion of the circuit is already built in — it depends on how much of the surplus money, m, goes into the renewed circuit.
In P...P, P can start the new circuit with the same value — perhaps even a smaller one — and still represent reproduction on an expanded scale: for instance, if the elements of the commodity get cheaper because labour's productive power has increased. Conversely, in the opposite case, productive capital that has grown in value can represent reproduction on a materially narrower scale — for instance, if the elements of production get more expensive. The same holds for C'...C'.
In C'...C', capital in commodity form is presupposed for production; it recurs within this circuit as a presupposition in the second C. If this C hasn't yet been produced or reproduced, the circuit is blocked; this C has to be reproduced, for the most part as the C' of some other industrial capital. In this circuit, C' exists as starting point, passing point, and closing point of the movement — it is therefore always there. It is a standing condition of the reproduction process.
C'...C' differs from Forms I and II in one more respect. All three circuits share this: the form in which capital opens its circuit is the same form in which it closes it, so that it's back in its starting form, ready to open the very same circuit again. The starting form — M for Form I, P for Form II, C' for Form III — is always the form in which the capital-value (in Form III, together with the surplus-value it has grown by) is advanced; relative to the circuit, this is its original form. The closing form — M' for Form I, P for Form II, C' for Form III — is, each time, a transformed version of some functional form that came earlier in the circuit, and is not the original form.
So M' in Form I is a transformed form of C' (and in I and II this transformation happens through a simple act of commodity circulation — a formal change of place between commodity and money); the closing P in Form II is a transformed form of M; in Form III, C' is a transformed form of P, of productive capital. But here in III, first, the transformation affects not just capital's functional form but also its value-magnitude; and second, the transformation isn't the result of a merely formal change of place belonging to the circulation process, but of the real transformation that the use-form and value of the commodity elements of productive capital have gone through in the production process.
The form of the starting extreme — M, P, C' — is presupposed for each circuit, I, II, III; the form that recurs at the closing extreme is posited, and so conditioned, by the chain of metamorphoses of the circuit itself. C', as the closing point of an individual industrial capital's circuit, presupposes only P — the same industrial capital's non-circulation form — of which C' is the product. M', as the closing point in I, as a transformed form of C' (C'-M'), presupposes M in the buyer's hands, existing outside the circuit M...M' and drawn into it by the sale of C', becoming its own closing form. Likewise in II, the closing P presupposes L and mp (that is, C) as existing outside the circuit and, through M-C, incorporated into it as its closing form.
But apart from this last extreme, neither the circuit of the individual money-capital presupposes the existence of money-capital in general, nor does the circuit of the individual productive capital presuppose that of productive capital in general, within their own circuits. In I, M can be the very first money-capital ever to appear on the historical stage; in II, P can be the very first productive capital to appear on it. But in III —
In Form III, commodities are presupposed twice over as existing outside the circuit. Once, in the circuit C'-M'-C: this C, so far as it consists of means of production, is a commodity in the seller's hands; it's itself commodity-capital, so far as it's the product of a capitalist production process — and even if it isn't, it still shows up as commodity-capital in the merchant's hands. The other time, in the second c of c-m-c, which likewise has to exist as a commodity in order to be bought. In any case, whether commodity-capital or not, L and mp are commodities just as much as C', and stand toward each other as commodities. The same holds for the second c in c-m-c. So, to the extent that C' = C (L + mp), it has commodities as its own constituent elements and has to be replaced, in circulation, by equal commodities — just as, in c-m-c, the second c has to be replaced in circulation by other, equal commodities.
On the basis of the capitalist mode of production, once it's the dominant one, moreover, every commodity in the seller's hands has to be commodity-capital. It goes on being commodity-capital in the merchant's hands, or becomes commodity-capital there if it wasn't already. Or else it has to be a commodity — imported goods, say — that replaces an original commodity-capital, and so has simply given it another form of existence.
The commodity elements, L and mp, that make up productive capital P don't have, as forms of existence of P, the same shape they had on the various commodity markets where they were gathered together. Now they're united, and it's in this combination that they can function as productive capital.
That it's only in this Form III, within the circuit itself, that C appears as the presupposition of C, comes from the fact that the starting point is capital in commodity form. The circuit opens with the exchange of C' (so far as it functions as capital-value, whether enlarged by an addition of surplus-value or not) for the commodities that form its elements of production. But this exchange takes in the whole circulation process C-M-C (= L + mp) and is its result. So here C stands at both extremes — but the second extreme, which gets its form C from outside, from the commodity market, through M-C, is not the last extreme of the circuit, only of its first two stages, which make up the circulation process. Its result is P, whose function — the production process — then begins. Only as the result of that, and so not as a result of the circulation process, does C' appear as the close of the circuit, in the same form as the starting extreme, C'.
In M...M' and P...P, by contrast, the closing extremes, M' and P, are immediate results of the circulation process. So there, only at the close is the one, M', or the other, P, presupposed as being in another's hands. As long as the circuit runs between the extremes, neither M in the one case nor P in the other — the existence of M as someone else's money, of P as someone else's production process — appears as a presupposition of these circuits. C'...C', by contrast, presupposes C (= L + mp) as someone else's commodities, in someone else's hands, drawn into the circuit by the opening circulation process and turned into productive capital — and it's as the result of that capital's functioning that C' again becomes the closing form of the circuit.
But precisely because the circuit C'...C', in the course of running itself, presupposes other industrial capital in the form of C (= L + mp) — and mp encloses various different other capitals, for instance in our case machines, coal, oil, and so on — it invites being looked at not only as the general form of the circuit, a social form under which every individual industrial capital can be viewed (except at its very first setting-up), and so not only as a form of movement common to all individual industrial capitals, but at the same time as the form of movement of the sum of individual capitals — the total capital of the capitalist class — a movement in which each individual industrial capital's own movement appears only as one partial movement, interwoven with the others and conditioned by them.
If we look, say, at a country's total annual commodity-product, and analyze the movement by which one part of it replaces productive capital in every individual business while another part goes into the individual consumption of the various classes, then we're looking at C'...C' as the form of movement of social capital, and of the surplus-value — or surplus-product — that social capital produces. That social capital is the sum of individual capitals (including joint-stock capital, and state capital too, wherever governments employ productive wage-labour in mines, railways, and so on, functioning as industrial capitalists), and that the total movement of social capital equals the algebraic sum of the movements of the individual capitals — none of this rules out that this movement, looked at as the movement of an isolated individual capital, shows different features than the very same movement looked at as part of the total movement of social capital, in its connection with the movements of its other parts. Nor does it rule out that the total movement, at the same time, solves problems whose solution has to be presupposed, not derived, when we look at the circuit of a single individual capital.
C'...C' is the only circuit in which the capital-value originally advanced forms only part of the extreme that opens the movement, and the movement announces itself from the outset as the total movement of industrial capital: both the part of the product that replaces productive capital, and the part that forms surplus-product — which, on average, is spent partly as revenue and partly has to serve as an element of accumulation. To the extent that spending surplus-value as revenue is included in this circuit, individual consumption is included too. And individual consumption is included further still, because the starting point, C, exists as some arbitrary article of use; but every article produced capitalistically is commodity-capital, regardless of whether its use-form marks it out for productive consumption, for individual consumption, or for both.
M...M' points only to the value side — the valorization of the advanced capital-value as the purpose of the whole process; P...P (or P') points to capital's production process as a reproduction process, with productive capital's size staying the same or growing (accumulation). C'...C', while it already announces itself in its starting extreme as a shape of capitalist commodity-production, encloses productive and individual consumption from the outset; productive consumption, and the valorization bound up in it, appears only as one branch of its movement.
Finally, since C' can exist in a use-form that can't go back into any production process, it's clear from the start that the different value-components of C', expressed in parts of the product, have to occupy different places depending on whether C'...C' is taken as the form of movement of total social capital or as the independent movement of an individual industrial capital. In all these peculiarities, this circuit points beyond itself as the isolated circuit of a merely individual capital.
In the figure C'...C', the movement of commodity-capital — that is, of the capitalistically produced total product — appears both as a presupposition of the individual capital's independent circuit and, in turn, as conditioned by that circuit. So if this figure is to be grasped in its own peculiarity, it is no longer enough to rest content with saying that the metamorphoses C'-M' and M-C are, on the one hand, functionally determined sections in the metamorphosis of capital, and, on the other, links in the general circulation of commodities. It becomes necessary to lay bare how the metamorphoses of one individual capital interweave with those of other individual capitals, and with the part of the total product meant for individual consumption. That's why, in analyzing the circuit of the individual industrial capital, we mainly take the first two forms as our basis.
As the form of a single individual capital, the circuit C'...C' shows up, for instance, in agriculture, where the reckoning runs from harvest to harvest. Figure II starts from the sowing, Figure III from the harvest — or, as the Physiocrats put it, the former starts from the avances (advances), the latter from the reprises (returns). In III, the movement of the capital-value appears from the outset as only part of the movement of the general mass of products, while in I and II the movement of C' is only one moment in the movement of a single isolated capital.
In Figure III, commodities sitting on the market form the standing presupposition of the production and reproduction process. So if you fix on this figure alone, every element of the production process seems to come out of commodity circulation and consists of nothing but commodities. That one-sided view overlooks the elements of the production process that are independent of the commodity elements.
Since, in C'...C', the total product (the total value) is the starting point, this is where it becomes clear that — leaving foreign trade aside — reproduction on an expanded scale, with productivity otherwise unchanged, can only happen if the material elements of the extra productive capital are already contained in the part of the surplus-product due to be capitalized. So, to the extent that one year's production serves as the presupposition for the next — or to the extent that this can happen within a single year, alongside simple reproduction — surplus-product is produced right away in the form that fits it to function as additional capital. Increased productivity can only increase the material stuff of capital, without raising its value; but in doing so, it supplies extra material for valorization.
C'...C' underlies Quesnay's Tableau économique, and it shows real tact and good judgment on his part that, unlike M...M' — the form the mercantile system holds onto in isolation — he chose this form, and not P...P.
The general formula for the circuit of commodity capital looks like this:
C' shows up not just as a product, but also as something the two earlier circuits already assumed. What is M-C for one capital already contains C'-M' for another — because at least part of any capital's means of production is itself the commodity-product of some other individual capital, one that's running through its own circuit. In our example, the coal, the machines, and so on are the commodity capital of the coal-mine owner, of the capitalist machine-builder, and so on.
It was already shown in Chapter 1, 4 that even at the very first repeat of M...M', before that second circuit of money capital is even finished, both the circuit P...P and the circuit C...C' are already presupposed.
If reproduction takes place on an expanded scale, then the closing C' is larger than the opening C', and should therefore be called C'' here.
The third form differs from the first two, first, in this: here it's the overall circulation, with its two opposite phases, that opens the circuit. In Form I, by contrast, circulation gets interrupted by the process of production; in Form II, the overall circulation, with its two complementary phases, appears only as mediating the process of reproduction, forming the movement that mediates between the two P's — between production and its renewal.
At M...M', the circulation takes the form M-C...C'-M', that is, M-C-M. At P...P it's the reverse: C'-M'.M-C, that is, C-M-C. In C'...C' it likewise has this same latter form.
Second: in the repeated circuits I and II, even though the closing points M' and P' become the starting points of the renewed circuit, the form in which they were produced disappears. M' = M+s, P' = P+s — each simply starts the new process again as M and P. In Form III, though, the starting point C must be called C' even when the circuit is renewed at the same scale, and here's why.
In Form I, as soon as M' as such opens a new circuit, it functions as money capital M — an advance, in money-form, of the capital-value that is to be valorized. The size of the advanced money capital has grown, through the accumulation carried out in the first circuit. But whether the advanced money capital comes to £422 or £500 makes no difference: either way it appears simply as capital-value. M' no longer exists as valorized capital, as capital pregnant with surplus-value, as the capital-relation — it has yet to be valorized in the process. The same holds for P...P': P' must always keep functioning as P, as capital-value that is still to produce surplus-value, in order to renew the circuit.
The circuit of commodity capital, by contrast, doesn't open with capital-value but with capital-value that has already grown, in commodity-form — so from the very start it includes the circuit not only of the capital-value present in commodity-form but also of the surplus-value. So if this form undergoes simple reproduction, a C' of the same size shows up at the close as at the start. If part of the surplus-value goes into the capital's circuit, then a larger C' — call it C'' — appears at the close instead of C'; but the circuit that follows opens again with C', which is simply a larger C' than in the previous circuit, and begins its new circuit with a larger accumulated capital-value, and so also with a proportionally larger newly produced surplus-value. In every case, C' opens the circuit always as a commodity capital that equals capital-value plus surplus-value.
C' functioning as C, within the circuit of a single industrial capital, doesn't appear as a form of that capital — it appears as a form of some other industrial capital, insofar as the means of production are that other capital's product. The act M-C (that is, M-C for means of production) for the first capital is C'-M' for this second capital.
In the circulation act M-C, labour-power and means of production behave identically in one respect: both are commodities in the hands of their sellers — labour-power in the hands of the workers who sell it, means of production in the hands of the owners who sell them. For the buyer, whose money here functions as money capital, they're only commodities for as long as he hasn't yet bought them — for as long as they still confront his capital, which exists in money-form, as commodities belonging to someone else.
Means of production and labour-power differ here only in this: means of production, in the hands of their seller, can be C' — that is, capital — if they're the commodity-form of that seller's capital. Labour-power, by contrast, is always merely a commodity for the worker, and becomes capital only in the hands of the buyer, as a component of P.
C' can therefore never open a circuit as mere C, as a mere commodity-form of the capital-value. As commodity capital, it's always a double thing. Looked at from the standpoint of use-value, it's the product of P's function — here, yarn — whose elements, labour-power and means of production, arriving from circulation as commodities, functioned only as the formers of this product. Second, looked at from the standpoint of value, it's the capital-value P plus the surplus-value produced by P's functioning.
Only within the circuit of C' itself can — and must — C, which equals P, which equals the capital-value, split off from the part of C' in which surplus-value exists: from the surplus-product that carries the surplus-value. It doesn't matter whether the two are actually separable, as with yarn, or not, as with a machine. They become separable every time, as soon as C' is converted into M'.
If the whole commodity-product can be split into independent, uniform part-products — like our 10,000 lb of yarn — so that the act C'-M' can take the form of a series of sales carried out one after another, then the capital-value can function as C in commodity-form and detach itself from C' before the surplus-value is realized — that is, before C' as a whole is realized.
Take the 10,000 lb of yarn worth £500. The value of 8,440 lb of it — £422 — equals the capital-value, kept separate from the surplus-value. If the capitalist sells those 8,440 lb of yarn for £422 first, then this 8,440 lb represents C, the capital-value in commodity-form; the remaining surplus-product contained in C' — 1,560 lb of yarn = £78 of surplus-value — would only enter circulation later. The capitalist could complete the capital-value's sale-and-repurchase, C-M-C before the surplus product's own circulation c-m-c — its sale and the spending of the proceeds — had even begun.
Or, if he first sold 7,440 lb of yarn worth £372, and then 1,000 lb of yarn worth £50, then the first part of C could replace the means of production — the constant part of capital, c — and the second part of C could replace the variable part of capital, v, meaning the labour-power. And it would work the same way as before.
But if such successive sales do happen, and the conditions of the circuit allow it, the capitalist can also make this same split — into c + v + s — within aliquot parts of C', rather than only across C' as a whole.
For example, 7,440 lb of yarn = £372, which as part of C' (10,000 lb of yarn = £500) represents the constant part of capital, can itself be broken down further: 5,535·360 lb of yarn worth £276·768, which merely replaces the constant part — the value of the means of production used up in producing the 7,440 lb; 744 lb of yarn worth £37·200, which replaces only the variable capital; and 1,160·640 lb of yarn worth £58·032, which as surplus-product carries the surplus-value.
So out of the 7,440 lb sold, he can replace the capital-value they contain by selling 6,279·360 lb of yarn at a price of £313·968, and spend the value of the surplus-product — 1,160·640 lb = £58·032 — as revenue.
In the same way, he can further break down the 1,000 lb of yarn = £50 = the variable capital-value, and sell accordingly: 744 lb of yarn at £37·200, the constant capital-value of the 1,000 lb; 100 lb of yarn at £5·000, its variable capital part; together 844 lb of yarn at £42·200, replacing the capital-value contained in the 1,000 lb; and finally 156 lb of yarn worth £7·800, representing the surplus-product contained in it, which can be consumed as such.
Finally, if the sale succeeds, he can break down the remaining 1,560 lb of yarn worth £78 so that selling 1,160·640 lb of yarn at £58·032 replaces the value of the means of production contained in the 1,560 lb, and 156 lb of yarn worth £7·800 replaces the variable capital-value — together, 1,316·640 lb = £65·832, replacing the entire capital-value. Finally, the surplus-product of 243·360 lb = £12·168 remains to be spent as revenue.
Just as every element — c, v, s — existing in the yarn can be broken down again into these same parts, so too can every single pound of yarn worth 1 shilling = 12 pence.
Add up the results of the three partial sales above, and you get exactly the same result as selling the 10,000 lb of yarn all at once.
C'-M' is, by itself, nothing but a sale of 10,000 lb of yarn. The 10,000 lb of yarn is a commodity like any other yarn. The buyer cares about the price: 1 shilling a pound, or £500 for the 10,000 lb. If he gets drawn into talking about how that value breaks down, it's only with the sly aim of showing that the pound could be sold under a shilling and the seller would still be doing good business. But how much he buys depends on his own needs — if he's a weaving-mill owner, say, it depends on the make-up of his own capital at work in weaving, not on the make-up of the spinner's capital, the one he's buying from.
The proportions in which C' has, on one side, to replace the capital worked up in it — or rather its various parts — and, on the other side, has to serve as surplus-product, whether for spending as surplus-value or for accumulating as capital, exist only within the circuit of the capital whose commodity-form this 10,000 lb of yarn is. They have nothing to do with the sale as such. It's also assumed here that C' sells at its value, so that all that's happening is its conversion from commodity-form into money-form.
For C', as the functional form within this particular capital's circuit — the form out of which the productive capital has to be replaced — it obviously matters a great deal whether, and how far, price and value diverge in the sale. But that's not our business here, where we're looking only at the bare differences of form.
In Form I, M...M', the production process appears in the middle, between the two circulation phases of capital that complete each other and stand opposed to each other. It's already over and done with by the time the closing phase, C'-M', begins. Money is advanced as capital: first it goes into the elements of production, then those are turned into a commodity product, and that product is turned back into money. This is one finished business cycle, and its result is money — usable for absolutely anything.
So starting the cycle again is only a possibility here, not something guaranteed. M...P...M' can just as well be the very last circuit, closing out an individual capital's business when its owner retires, as it can be the first circuit of a capital just starting up. The general movement here is M...M' — money becoming more money.
In Form II, P...C'-M'-C...P (or P'), the whole circulation process comes after the first P and before the second — but in the reverse order from Form I. The first P is productive capital, and its job, the production process, is what has to happen before the circulation process that follows it. The closing P, though, is not the production process itself. It's only industrial capital showing up again in its shape as productive capital. And it gets there because the last phase of circulation converted the capital-value into labour-power and means of production — the human and material factors that, joined together, are what productive capital consists of. Capital, whether P or the larger P', ends up back in a form where it has to function as productive capital again and go through the production process once more.
The general shape of this movement, P...P, is the shape of reproduction. Unlike M...M', it doesn't announce valorization as the point of the whole exercise. That makes it all the easier for classical economics to set aside capitalism's specific form of the production process and present production itself as the point — as if the goal were simply to produce as much as possible, as cheaply as possible, and exchange the product for as many different other products as possible: partly to start production up again (M-C), partly for consumption (m-c). Because money here, M and m, shows up only as a means of circulation that vanishes the moment it's used, the special features of both money and money-capital can be lost sight of, and the whole process appears simple and natural — the naturalness of a flat, shallow rationalism.
The same thing happens with commodity-capital: profit occasionally gets forgotten, and as soon as the production circuit is discussed as a whole, commodity-capital figures merely as 'commodity'; when its value-components come up, it figures as commodity-capital. Accumulation, naturally, appears the same way production does.
In Form III, the two phases of the circulation process open the circuit, in the same order as in Form II, P...P; then P follows, functioning as in Form I — the production process; and the circuit closes with that process's result, C'. As in Form II, where P is only the renewed presence of productive capital, here the circuit closes with C', the renewed presence of commodity-capital. And just as in Form II capital, in its closing form P, has to begin the process again as a production process, here too, once industrial capital reappears in the form of commodity-capital, the circuit has to open itself anew with the circulation phase C'-M'. Both of these forms are unfinished, because neither closes with M', the valorized capital-value turned back into money. Both must therefore be carried further, and so they include reproduction within themselves. The whole circuit in Form III is C'...C'.
What sets the third form apart from the first two is that only in this circuit does the valorized capital-value — not the original capital-value still to be valorized — appear as the starting point of its own valorization. C', as a capital-relation, is the starting point here, and as such it determines the whole circuit: already in its first phase it encloses both the circuit of the capital-value and the circuit of the surplus-value. And the surplus-value — if not in every single circuit, then on average — has to run partly through the circulation m-c-m as revenue spent, and partly serve as an element of capital accumulation.
In the form C'...C', consumption of the entire commodity-product is presupposed as a condition for the normal course of capital's circuit itself. The worker's individual consumption, together with the individual consumption of the part of the surplus-product that isn't accumulated, makes up the whole of individual consumption. So consumption, in its entirety — both individual and productive — enters the circuit C' as a condition. Productive consumption (which really includes the worker's individual consumption within it, since labour-power is, within certain limits, a constant product of the worker's individual consumption) is carried out by each individual capital itself. Individual consumption, beyond what the individual capitalist needs for his own existence, is only assumed here as a social act — not at all as an act of the individual capitalist.
In Forms I and II, the whole movement presents itself as the movement of the advanced capital-value. In Form III, the valorized capital, in the shape of the entire commodity-product, forms the starting point and has the form of capital in motion — commodity-capital. Only once it's turned into money does this movement branch off into a movement of capital and a movement of revenue. The distribution of the total social product — and likewise the particular distribution of the product belonging to each individual commodity-capital — partly into funds for individual consumption, partly into funds for reproduction, is, in this form, built into capital's circuit itself.
In M...M', a possible expansion of the circuit is already built in — it depends on how much of the surplus money, m, goes into the renewed circuit.
In P...P, P can start the new circuit with the same value — perhaps even a smaller one — and still represent reproduction on an expanded scale: for instance, if the elements of the commodity get cheaper because labour's productive power has increased. Conversely, in the opposite case, productive capital that has grown in value can represent reproduction on a materially narrower scale — for instance, if the elements of production get more expensive. The same holds for C'...C'.
In C'...C', capital in commodity form is presupposed for production; it recurs within this circuit as a presupposition in the second C. If this C hasn't yet been produced or reproduced, the circuit is blocked; this C has to be reproduced, for the most part as the C' of some other industrial capital. In this circuit, C' exists as starting point, passing point, and closing point of the movement — it is therefore always there. It is a standing condition of the reproduction process.
C'...C' differs from Forms I and II in one more respect. All three circuits share this: the form in which capital opens its circuit is the same form in which it closes it, so that it's back in its starting form, ready to open the very same circuit again. The starting form — M for Form I, P for Form II, C' for Form III — is always the form in which the capital-value (in Form III, together with the surplus-value it has grown by) is advanced; relative to the circuit, this is its original form. The closing form — M' for Form I, P for Form II, C' for Form III — is, each time, a transformed version of some functional form that came earlier in the circuit, and is not the original form.
So M' in Form I is a transformed form of C' (and in I and II this transformation happens through a simple act of commodity circulation — a formal change of place between commodity and money); the closing P in Form II is a transformed form of M; in Form III, C' is a transformed form of P, of productive capital. But here in III, first, the transformation affects not just capital's functional form but also its value-magnitude; and second, the transformation isn't the result of a merely formal change of place belonging to the circulation process, but of the real transformation that the use-form and value of the commodity elements of productive capital have gone through in the production process.
The form of the starting extreme — M, P, C' — is presupposed for each circuit, I, II, III; the form that recurs at the closing extreme is posited, and so conditioned, by the chain of metamorphoses of the circuit itself. C', as the closing point of an individual industrial capital's circuit, presupposes only P — the same industrial capital's non-circulation form — of which C' is the product. M', as the closing point in I, as a transformed form of C' (C'-M'), presupposes M in the buyer's hands, existing outside the circuit M...M' and drawn into it by the sale of C', becoming its own closing form. Likewise in II, the closing P presupposes L and mp (that is, C) as existing outside the circuit and, through M-C, incorporated into it as its closing form.
But apart from this last extreme, neither the circuit of the individual money-capital presupposes the existence of money-capital in general, nor does the circuit of the individual productive capital presuppose that of productive capital in general, within their own circuits. In I, M can be the very first money-capital ever to appear on the historical stage; in II, P can be the very first productive capital to appear on it. But in III —
In Form III, commodities are presupposed twice over as existing outside the circuit. Once, in the circuit C'-M'-C: this C, so far as it consists of means of production, is a commodity in the seller's hands; it's itself commodity-capital, so far as it's the product of a capitalist production process — and even if it isn't, it still shows up as commodity-capital in the merchant's hands. The other time, in the second c of c-m-c, which likewise has to exist as a commodity in order to be bought. In any case, whether commodity-capital or not, L and mp are commodities just as much as C', and stand toward each other as commodities. The same holds for the second c in c-m-c. So, to the extent that C' = C (L + mp), it has commodities as its own constituent elements and has to be replaced, in circulation, by equal commodities — just as, in c-m-c, the second c has to be replaced in circulation by other, equal commodities.
On the basis of the capitalist mode of production, once it's the dominant one, moreover, every commodity in the seller's hands has to be commodity-capital. It goes on being commodity-capital in the merchant's hands, or becomes commodity-capital there if it wasn't already. Or else it has to be a commodity — imported goods, say — that replaces an original commodity-capital, and so has simply given it another form of existence.
The commodity elements, L and mp, that make up productive capital P don't have, as forms of existence of P, the same shape they had on the various commodity markets where they were gathered together. Now they're united, and it's in this combination that they can function as productive capital.
That it's only in this Form III, within the circuit itself, that C appears as the presupposition of C, comes from the fact that the starting point is capital in commodity form. The circuit opens with the exchange of C' (so far as it functions as capital-value, whether enlarged by an addition of surplus-value or not) for the commodities that form its elements of production. But this exchange takes in the whole circulation process C-M-C (= L + mp) and is its result. So here C stands at both extremes — but the second extreme, which gets its form C from outside, from the commodity market, through M-C, is not the last extreme of the circuit, only of its first two stages, which make up the circulation process. Its result is P, whose function — the production process — then begins. Only as the result of that, and so not as a result of the circulation process, does C' appear as the close of the circuit, in the same form as the starting extreme, C'.
In M...M' and P...P, by contrast, the closing extremes, M' and P, are immediate results of the circulation process. So there, only at the close is the one, M', or the other, P, presupposed as being in another's hands. As long as the circuit runs between the extremes, neither M in the one case nor P in the other — the existence of M as someone else's money, of P as someone else's production process — appears as a presupposition of these circuits. C'...C', by contrast, presupposes C (= L + mp) as someone else's commodities, in someone else's hands, drawn into the circuit by the opening circulation process and turned into productive capital — and it's as the result of that capital's functioning that C' again becomes the closing form of the circuit.
But precisely because the circuit C'...C', in the course of running itself, presupposes other industrial capital in the form of C (= L + mp) — and mp encloses various different other capitals, for instance in our case machines, coal, oil, and so on — it invites being looked at not only as the general form of the circuit, a social form under which every individual industrial capital can be viewed (except at its very first setting-up), and so not only as a form of movement common to all individual industrial capitals, but at the same time as the form of movement of the sum of individual capitals — the total capital of the capitalist class — a movement in which each individual industrial capital's own movement appears only as one partial movement, interwoven with the others and conditioned by them.
If we look, say, at a country's total annual commodity-product, and analyze the movement by which one part of it replaces productive capital in every individual business while another part goes into the individual consumption of the various classes, then we're looking at C'...C' as the form of movement of social capital, and of the surplus-value — or surplus-product — that social capital produces. That social capital is the sum of individual capitals (including joint-stock capital, and state capital too, wherever governments employ productive wage-labour in mines, railways, and so on, functioning as industrial capitalists), and that the total movement of social capital equals the algebraic sum of the movements of the individual capitals — none of this rules out that this movement, looked at as the movement of an isolated individual capital, shows different features than the very same movement looked at as part of the total movement of social capital, in its connection with the movements of its other parts. Nor does it rule out that the total movement, at the same time, solves problems whose solution has to be presupposed, not derived, when we look at the circuit of a single individual capital.
C'...C' is the only circuit in which the capital-value originally advanced forms only part of the extreme that opens the movement, and the movement announces itself from the outset as the total movement of industrial capital: both the part of the product that replaces productive capital, and the part that forms surplus-product — which, on average, is spent partly as revenue and partly has to serve as an element of accumulation. To the extent that spending surplus-value as revenue is included in this circuit, individual consumption is included too. And individual consumption is included further still, because the starting point, C, exists as some arbitrary article of use; but every article produced capitalistically is commodity-capital, regardless of whether its use-form marks it out for productive consumption, for individual consumption, or for both.
M...M' points only to the value side — the valorization of the advanced capital-value as the purpose of the whole process; P...P (or P') points to capital's production process as a reproduction process, with productive capital's size staying the same or growing (accumulation). C'...C', while it already announces itself in its starting extreme as a shape of capitalist commodity-production, encloses productive and individual consumption from the outset; productive consumption, and the valorization bound up in it, appears only as one branch of its movement.
Finally, since C' can exist in a use-form that can't go back into any production process, it's clear from the start that the different value-components of C', expressed in parts of the product, have to occupy different places depending on whether C'...C' is taken as the form of movement of total social capital or as the independent movement of an individual industrial capital. In all these peculiarities, this circuit points beyond itself as the isolated circuit of a merely individual capital.
In the figure C'...C', the movement of commodity-capital — that is, of the capitalistically produced total product — appears both as a presupposition of the individual capital's independent circuit and, in turn, as conditioned by that circuit. So if this figure is to be grasped in its own peculiarity, it is no longer enough to rest content with saying that the metamorphoses C'-M' and M-C are, on the one hand, functionally determined sections in the metamorphosis of capital, and, on the other, links in the general circulation of commodities. It becomes necessary to lay bare how the metamorphoses of one individual capital interweave with those of other individual capitals, and with the part of the total product meant for individual consumption. That's why, in analyzing the circuit of the individual industrial capital, we mainly take the first two forms as our basis.
As the form of a single individual capital, the circuit C'...C' shows up, for instance, in agriculture, where the reckoning runs from harvest to harvest. Figure II starts from the sowing, Figure III from the harvest — or, as the Physiocrats put it, the former starts from the avances (advances), the latter from the reprises (returns). In III, the movement of the capital-value appears from the outset as only part of the movement of the general mass of products, while in I and II the movement of C' is only one moment in the movement of a single isolated capital.
In Figure III, commodities sitting on the market form the standing presupposition of the production and reproduction process. So if you fix on this figure alone, every element of the production process seems to come out of commodity circulation and consists of nothing but commodities. That one-sided view overlooks the elements of the production process that are independent of the commodity elements.
Since, in C'...C', the total product (the total value) is the starting point, this is where it becomes clear that — leaving foreign trade aside — reproduction on an expanded scale, with productivity otherwise unchanged, can only happen if the material elements of the extra productive capital are already contained in the part of the surplus-product due to be capitalized. So, to the extent that one year's production serves as the presupposition for the next — or to the extent that this can happen within a single year, alongside simple reproduction — surplus-product is produced right away in the form that fits it to function as additional capital. Increased productivity can only increase the material stuff of capital, without raising its value; but in doing so, it supplies extra material for valorization.
C'...C' underlies Quesnay's Tableau économique, and it shows real tact and good judgment on his part that, unlike M...M' — the form the mercantile system holds onto in isolation — he chose this form, and not P...P.